FRM Practice Test

Financial Risk Management Exam at a Glance

What changed for Financial Risk Management in 2026

• Oct 25, 2026: Number of questions (Part I) changed to 100 questions (previously 100 multiple-choice questions).^[1]
• Oct 25, 2026: Registration opens changed to May 2027: Dec 1, 2026; Aug 2027: Mar 1, 2027; Nov 2027: May 1, 2027 (previously May 2027: December 1, 2026; August 2027: March 1, 2027).^[5]
• Oct 25, 2026: Validity (Part I) changed to Pass Part II by December 31 of the 4th year after passing Part I (previously Pass Part II by December 31 of the fourth year after passing Part I).^[2]
• Oct 25, 2026: Renewal changed to 40 CPD credits every two years (previously CPD expectation: 40 credits every two years).^[3]

What the Financial Risk Management is and how it works

According to Global Association of Risk Professionals, “The FRM Exam Part I contains 100 equally weighted questions, and the FRM Exam Part II has 80 equally weighted questions.”^[1]

The Financial Risk Management certification from the Global Association of Risk Professionals (GARP) is aimed at people who measure, manage and oversee financial risk. It is split into Part I and Part II, and both are computer-based multiple-choice exams.

Part I contains 100 equally weighted questions and Part II contains 80 equally weighted questions. Candidates are given 4 hours to complete each part. Both exams are scored on a pass/fail basis, and GARP does not publish a numeric cut score, so you should not expect to find a target percentage to aim for. Treat any figure quoted elsewhere as unofficial.

There are no educational or professional prerequisites to register. If you pass Part I, you need to pass Part II by December 31 of the 4th year after passing Part I, so plan the gap between Part I and Part II deliberately.

Registration windows are set by GARP. Registration for the May 2027 exam opens on Dec 1, 2026, for the Aug 2027 exam on Mar 1, 2027, and for the Nov 2027 exam on May 1, 2027. Results are accessible within 8 weeks after the exam window closes. Once certified, professionals are expected to earn 40 CPD credits on a recurring cycle set by GARP.

Fees, deadlines and policies can change, so confirm them on the official GARP website before you register.

Financial Risk Management content outline and where to practise each area

The content areas below are copied from the official Financial Risk Management content outline published by Global Association of Risk Professionals, with the share of the exam each area carries. The right-hand column shows which of our practice sets covers it.

Worked examples: how to reason through Financial Risk Management questions

These are practice questions written for this site, not questions from the real exam. Each explanation shows why the right answer is right and why the others are wrong.

Example 1

Question: What is a 'Key Risk Indicator' (KRI) in operational risk management?

1. A financial ratio used to assess credit quality
2. A metric that provides early warning signals of increasing operational risk exposure
3. A mandatory regulatory disclosure about internal control failures
4. The minimum threshold for reporting operational losses to regulators

Answer: B. A metric that provides early warning signals of increasing operational risk exposure

Explanation:

The correct answer is the metric that gives early warning of rising operational risk. A key risk indicator is forward-looking: things like staff turnover, system downtime or error rates move before a loss event happens, which lets management act in time.

The financial ratio for credit quality is a credit analysis tool and says nothing about operational processes. The mandatory regulatory disclosure confuses an indicator with a reporting duty; a KRI is an internal management tool, not a filing. The minimum threshold for reporting losses to regulators describes a reporting rule, not a signal of trouble ahead.

Rule to remember: an indicator warns before the loss, while a loss data record describes what has already happened.

Example 2

Question: What is 'counterparty credit risk' (CCR) in the context of OTC derivatives?

1. The risk that the underlying asset in a derivative contract defaults
2. The risk that the counterparty to a derivative contract defaults before final settlement
3. The risk that derivative collateral loses value during the margin period of risk
4. The risk that regulatory changes make derivative contracts unenforceable

Answer: B. The risk that the counterparty to a derivative contract defaults before final settlement

Explanation:

Counterparty credit risk is the risk that the other party to a derivative contract defaults before final settlement. The loss arises when the contract has positive value to you and the counterparty cannot pay.

The option about the underlying asset defaulting mixes up the counterparty with the reference asset; the contract can have a counterparty problem even when the underlying is perfectly healthy. The option about collateral losing value during the margin period of risk describes a real feature of collateralised exposure, but it is a driver of exposure, not the definition of the risk. The option about regulatory changes making contracts unenforceable is legal or regulatory risk.

Rule to remember: ask who must pay you and whether they might fail to do so.

Example 3

Question: Which risk measure quantifies the potential loss beyond the Value at Risk (VaR) threshold?

1. Beta
2. Expected Shortfall (CVaR)
3. Standard deviation
4. Tracking error

Answer: B. Expected Shortfall (CVaR)

Explanation:

Expected Shortfall, also called Conditional VaR, is correct because it averages the losses in the tail beyond the VaR confidence level. VaR gives a threshold, and Expected Shortfall tells you how bad things are on average once that threshold is crossed.

Beta measures sensitivity to market movements, not tail loss. Standard deviation measures overall dispersion of returns around the mean and treats gains and losses alike, so it says nothing specific about losses beyond a cutoff. Tracking error measures how far a portfolio's returns deviate from a benchmark, which is a relative performance measure.

Rule to remember: VaR marks where the tail starts, and Expected Shortfall describes what is inside it.

How to use these practice tests

Start with the official GARP material for the part you are sitting, and read the list of content areas so you know what is covered. Then use the blueprint table above to match each area to a practice set.

Take a practice set before you study an area, without notes, to find out what you do not yet know. Read every explanation, including those for questions you answered correctly, because a lucky guess hides a gap. Keep a short list of mistakes written as rules, such as which measure describes the tail and which describes the threshold, and review that list before each session.

Once you have been through each area, move to the mixed sets and answer under time pressure. The real exam gives 4 hours per part, so practise sitting for long stretches without breaks in focus. Return to the official material whenever a topic keeps causing errors.

These questions are written by us to help you practise and are not real exam questions. Use them to find weak spots, not to predict your result. Check the registration dates on the GARP site and book your exam window early.

Sources & last verified

1. Global Association of Risk Professionals — number of questions, time limit, passing score, delivery (official source). “The FRM Exam Part I contains 100 equally weighted questions, and the FRM Exam Part II has 80 equally weighted questions.” Verified Oct 25, 2026 · source checked Oct 19, 2026.
2. Global Association of Risk Professionals — validity (official source). “Pass the FRM Exam Part II by December 31 of the 4th year of passing the FRM Exam Part I.” Verified Oct 25, 2026 · source checked Oct 19, 2026.
3. Global Association of Risk Professionals — renewal (official source). “FRM- and ERP-Certified Professionals are expected to earn 40 credits every two years throughout your career” Verified Oct 25, 2026 · source checked Oct 19, 2026.
4. Global Association of Risk Professionals — eligibility, score release (official source). “There are no educational or professional prerequisites needed to register.” Verified Oct 25, 2026 · source checked Oct 19, 2026.
5. Global Association of Risk Professionals — registration opens (official source). “Dec. 1, 2026 - Jan. 31, 2027” Verified Oct 25, 2026.
6. Global Association of Risk Professionals — other (official source). “foundations of risk management part i exam weight 20%” Verified Oct 28, 2026.

How we verify: editorial & fact-checking policy. Report an error: contact us.